Dáil Éireann Debate, Wednesday - 30 May 2018
48. Deputy Martin Kenny asked the Minister for Agriculture, Food and the Marine his plans to deal with low farm income in the cattle rearing and sheep farming sectors as outlined in the Teagasc national farm income survey which showed that direct payments make up 113% of income for these farmers; and the way in which he plans to redress this imbalance under the new Common Agricultural Policy arrangements by targeting the low income sectors. [23724/18]
Amharc ar fhreagraThe Teagasc national farm income survey indicates sheep farming and cattle rearing is at a low rate for many farmers, which is alarming, particularly with the new Common Agricultural Policy, CAP, being put in place. Will the Minister give us absolute reassurance that these sectors will be targeted and looked after to ensure imbalances will be taken care of as we move into the future?
In March this year the Central Statistics Office, CSO, released its preliminary estimate of output, input and income in agriculture and this indicates that aggregate farm income, or operating surplus, increased by 35% to €3.498 billion in 2017. This followed an increase in aggregate farm income of 3.6% in 2016 and 2.3% in 2015. Last week Teagasc released preliminary results of its national farm survey for 2017, which indicated that average family farm income was the highest on record at almost €31,400, a 32% increase on 2016, driven largely by a 65% increase in dairy farm incomes to over €86,000 on average.
It should be noted there are significant differences in family farm income depending on the system of farming and the size of the farm. Average income on cattle rearing farms increased by 1% to €12,700 and on sheep farms it increased by 8% to €16,900. Average income on cattle finishing farms decreased by 1% to €16,700. Dairy farms are consistently the most profitable farms, both on an average per farm and per hectare basis. However, it should be borne in mind that almost all dairy farms are classified as full-time farms in terms of the labour input required. Most cattle farms and the majority of sheep farms are classified as part-time in terms of labour input requirements. Dry stock cattle and sheep farms have a significant dependence on direct payments, which typically account for at least 100% of average farm income on these farms. This has not changed in recent years. Most dry stock farmers have off-farm sources of income, whether from off-farm employment of the farm holder or the spouse, State pensions or other social protection payments.
The Food Wise 2025 strategy includes actions to support farmers in improving the competitiveness and profitability of their enterprises. This includes actions aimed at helping farmers to improve productivity, manage the impact of price volatility and adopt new technologies. CAP direct payments, Ireland's rural development plan and our agri-taxation system include supports to incentivise land mobility, inter-generational transfer and farm restructuring, all of which are intended to improve farm competitiveness and sustainability, and to maximise the contribution of farm families to the local rural economy. I expect specific legislative proposals on CAP shortly.
This is probably a continuation of our previous questions. For very many farmers, the issue is, as the Minister states, 100% of the income comes from those payments. That is the problem. For very many of them, the payments are too low and they are not able to manage. There is an opportunity with CAP to do something about that with basic and direct payments. I suggest there should be targeting of small farmers and, for example, perhaps the first 15 ha could see a higher payment rate, the next 15 ha could see a medium payment rate and there would be a lower rate for the remainder. Most of the basic payment would be front-loaded towards the smaller family farm. Across Europe and the world, it is the model most people want. On the other side we have the areas of natural constraint, ANC, payments and we need to target them more so as to ensure the smaller family farm gets more of those payments.
The problem is many sectors, particularly sheep and cattle or suckler cow farmers do not have other options. The dairy farmers are doing very well and more power to them. We are all delighted to see them doing very well and it is great to see it but the other sectors need more assistance and help. I will come back about the marketing of the products.
I fully agree with Deputy Kenny's sentiments in saying that dairy farmers have done well and the figures for 2017 look reasonable. We have come through a horrendous winter, and the Minister knows what farmers had to deal with. I am sure the income will be well down in the 2018 figures. The new CAP should be more flexible for people. I have a constituent who is a married man with five children and he has paid over €100,000 in interest to banks over the past ten years. He is being forced to sell his cattle. He is three years into the genomics scheme but is force majeure possible for this farmer to allow him out of the scheme so he can sell his cattle and get himself out of trouble? He will be forced to do that.
In the context of the Teagasc farm income survey or the CSO figures we have seen a picture of two Irelands in agriculture. We have just concluded a CAP road show that was in Carlow, Charleville-----
Everywhere.
-----Navan and in the west of Ireland in Carrick-on-Shannon, and that picture was abundantly clear. It would be incorrect to dwell too much on the dairy figures as it is not that long ago since dairy prices were below the cost of production. The sector had quite a good year last year and volatility is something that must be managed. I accept the point that sheep and cattle rearing in particular are highly marginal enterprises. With the last CAP up to 2020 there was a redistributive effort put into payments that will see in the region of €100 million move from those with a higher per hectare payment to those below the average payment. It is inevitable that there will be a continuation of that trend of redistribution. If we are serious about valuing not just the economic output of those farms but also the potential they have to contribute public goods in terms of biodiversity, water quality, etc., the trend will continue in the next CAP.
If Deputy Scanlon wishes to bring the case he mentioned to my attention, I will have the matter investigated.
We are on the same page with much of this but the difficulty is we really need to see this opportunity through now. There is a crisis. Deputy Scanlon is correct and there are many farmers in serious trouble. These are mainly the people with suckler cows and sheep who have bad land and no other options. What will they do? We need to do something for them now to ensure the family farm model stays in place and works into the future.
These farmers have an excellent product. The lamb and beef they produce is first class. We need to find a way of marketing that better. I know there is Origin Green and great work being done by Bord Bia. These animals are grass-fed, free roaming and an example of low-impact grazing, and it is a niche market so we should try to sell that product with a premium price. We should not worry about what comes from the Mercosur nations, Australia or anywhere else as we have the top quality. I know we export much of the product from Ireland and this would bring the opportunity to make a better return to the primary producer. It is really what this is about. The primary producer must get a better return for the product as well as getting a better crack of the whip with the payments.
The Deputy has said we need something now. We secured €25 million extra for areas of natural constraint in the 2018 budget. We face choices in how that will be allocated. I await approval from the European Union on the decision as to where ANC fits in the rural development programme.
We took a decision not to spread that thinly across everybody but to focus on those with the highest level of disadvantage. I believe that is the right thing to do in that there is a little for everybody but it is focused on giving higher payments to those with the most disadvantaged lands. That is one point.
I take the Deputy's point about organic type production systems. There is a premium payable for organic beef through the Good Herdsmen operation. In the context of producer organisations, the Department could support producer organisations which market products specifically on the basis of their provenance. We have a number of groups in the hill sheep area in particular and I am sure it could happen on the beef side as well.
